1MDB-IPIC settlement achieved

A DEAL has been reached between Malaysia’s strategic development company 1Malaysia Development Bhd (1MDB) and Abu Dhabi’s state-owned International Petroleum Investment Company (IPIC) at the London Court of International Arbitration (LCIA). 1MDB will make certain payments to IPIC and will “assume responsibility for all future interest and principal payments for two bonds issued by the 1MDB Group… due in 2022”. This resolution will entail the “monetisation of investment fund units” of approximately US$2.43 billion (RM10.6 billion) in cash, which it will cover, thus confirming that 1MDB is not a victim of any misappropriation of funds.

The long-running dispute between 1MDB and IPIC has been a gold mine for those seeking to embarrass Putrajaya and, as blatantly stated by the detractors, to unseat the prime minister and his government. Obviously, the resolution cannot but puncture their elation, not unlike the dog now deprived of its bone. And, to rub salt into an already festering wound, this resolution paves the way towards the final stages of the completion of 1MDB’s rationalisation programme, the dispute with IPIC being the major challenge impeding the effort. A rationalised 1MDB is proof that all allegations against it are baseless and without merit. That 1MDB will be paying its own debts shows that the PetroSaudi investment, and the fund unit investments in 1MDB Global Investments and Brazen Sky that the critics claimed had been diverted to certain parties, exist in full.

Additionally, the successful sale of the fund units investments and the implementation of the settlement in cash will, too, achieve “no predicate offence”, meaning that all the brouhaha by some foreign entities alleging money laundering on the part of 1MDB will overnight become an academic exercise that has lost all reason for being. Again, it must be repeated that there has been no misappropriation of funds. And, too, there has been “no value lost in investments and fund units” and “no victim” in relation to 1MDB’s investments in fund units. Neither PetroSaudi nor IPIC nor Aabar Investments PJS are victims.

As such, any action or potential action to be taken by Singapore or the United States authorities against Malaysian and Abu Dhabi individuals will be moot and lack evidence. There is nothing whatsoever to prove there was misappropriation of public funds or money laundering. 1MDB’s ability to successfully meet the terms set by LCIA proves that the fund is fundamentally sound. The settlement between 1MDB and IPIC also demonstrates clearly that these foreign authorities have been chasing their own tails for as long as the controversy has been generated by parties with vested interest. It also shows that they have no in-depth understanding of the true situation. Not unnaturally, this will cause them to rethink their positions, unless, of course, their actions are politically motivated. That the locals spearheading the assault against 1MDB are so motivated is today crystal clear. Is 1MDB then not the victim?